WASHINGTON—NAFCU, CUNA, and the American Association of Credit Union Leagues (AACUL) have filed a joint amicus brief to the Supreme Court challenging the constitutionality of the CFPB's funding structure.
The Supreme Court later this year will hear the case of CFPB v. the Community Financial Services Association of America (CFSA); the U.S. Fifth Circuit Court of Appeals previously ruled the CFPB’s funding structure is unconstitutional.
Twenty-seven states have also told the Supreme Court the Bureau’s funding is unconstitutional.
CUNA: Transparency & Accountability
“The broad power of the CFPB wields over financial products that affect every consumer makes it especially important the bureau operate with maximum transparency and accountability,” said CUNA President/CEO Jim Nussle. “Its current structure brings it under less oversight than any other federal financial regulator, and we hope the court’s decision addresses the clear constitutional issues in the current structure, and that its decision while minimizing disruptions to the financial services marketplace as we suggest in our brief.”
NAFCU: ‘Overly Burdensome’
“For well over a decade, NAFCU has fought against the overly burdensome regulations from the CFPB on behalf of the 137 million people who rely on credit unions for their financial service needs,” said NAFCU President and CEO Dan Berger. “We have seen the agency wage a war on Main Street and impose rules that do more harm than good. It’s well past time to get them in check and give the CFPB long needed congressional oversight. I look forward to the Court hearing this critical case.”
Different Structure
The organizations noted the CFPB is structured differently than other financial regulators, including NCUA which is funded by credit unions and provides regulation and services to credit unions.
The brief calls for the court to affirm but stay the lower court’s judgement to minimize market disruptions and allow Congress to create a constitutionally sound structure for the Bureau.
“Eliminating the agency from the regulatory ecosystem overnight would be dangerous and create uncertainty,” the brief reads. “For this reason, the least disruptive remedy is for the Court to stay its judgment in the case for three to six months and leave the appropriations process to Congress.”
The Earlier Ruling
The 5th U.S. Circuit Court of Appeals found the CFPB’s funding mechanism unconstitutional in an October 2022 decision, and the U.S Supreme Court announced in February it would hear the challenge.
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